A breach of contract occurs when one party fails, without lawful excuse, to perform an obligation under a legally binding agreement. In Ontario you generally have two years from when you discovered the breach to sue, and you can pursue damages, and in some cases specific performance, through Small Claims Court (up to $50,000) or the Superior Court of Justice. A Toronto breach of contract lawyer can assess your agreement, send a demand letter, and pursue the claim in the right venue.
- A valid contract requires an offer, acceptance, consideration, and intention to create legal relations — and verbal contracts are enforceable in Ontario, though harder to prove.
- A material breach (going to the root of the contract) lets you treat the agreement as ended and sue for full damages; a minor breach only supports a claim for the resulting shortfall.
- You generally have two years from discovering the breach to sue, under Ontario's Limitations Act, 2002.
- Claims of $50,000 or less go to Small Claims Court; larger or more complex claims — including those seeking specific performance or an injunction — belong in the Superior Court of Justice.
- A well-drafted demand letter resolves a meaningful share of contract disputes before a claim is ever filed.
- Available remedies include damages, and in limited cases specific performance (a court order to perform the contract) where money alone would not be an adequate remedy.
What Counts as a Breach of Contract in Ontario?
To succeed on a breach of contract claim, you generally need to establish four things: a legally binding agreement existed (offer, acceptance, consideration, and an intention to create legal relations), the other party had a specific obligation under it, they failed to perform that obligation without a lawful excuse, and you suffered a loss as a result. Verbal contracts are binding in Ontario — the real challenge is almost always proof, not enforceability.
Common breach scenarios we see in Toronto include suppliers who fail to deliver goods or services as promised, clients who refuse to pay for completed work, businesses that violate non-compete or confidentiality clauses, and parties who simply walk away from a signed deal. See our breach of contract services page for how we handle these matters day to day, or our related guide on contract disputes generally if you are still assessing whether a true breach has occurred.
Material vs. Minor Breach — Why It Matters
Ontario law distinguishes between a material breach — a serious failure that goes to the root of the contract and defeats its entire purpose — and a minor breach, where the other party substantially performed but fell short in some smaller respect.
| Breach Type | What It Means | Your Options |
|---|---|---|
| Material | Defeats the purpose of the whole agreement | Treat the contract as ended; sue for full damages |
| Minor (Partial) | Substantial performance, with a specific shortfall | Sue for damages caused by the shortfall; contract continues |
Whether a breach is material affects whether you can walk away from your own remaining obligations under the contract — getting this wrong can itself expose you to a counterclaim.
Proving the Breach
Courts decide contract disputes on the evidence, not on who tells the more sympathetic story. Preserve the signed contract (or, for a verbal agreement, every email, text message, invoice, and witness who can confirm the terms), proof of your own performance, and a clear record of the other side's failure — missed deadlines, defective work, non-payment, or an outright refusal to proceed.
Your Two-Year Limitation Period
Under Ontario's Limitations Act, 2002, you generally have two years from the day you discovered — or reasonably ought to have discovered — the breach to start a claim. There is also an ultimate 15-year limitation period that runs from the date of the breach itself, regardless of when you found out. See our full guide to limitation periods for civil claims in Ontario for how discoverability works and the exceptions that can apply.
Missing the two-year deadline is usually fatal to a claim, no matter how strong it otherwise is. If you suspect a breach, get legal advice promptly — even if you are still trying to resolve things directly with the other side.
What You Can Recover
The most common remedy is damages — monetary compensation for your actual losses, which can include general damages (foreseeable losses flowing naturally from the breach) and special damages (specific losses that were communicated or foreseeable when the contract was made). In narrower circumstances — often real estate transactions or contracts involving unique goods — a court may order specific performance, requiring the breaching party to actually complete the contract, where damages alone would not fairly compensate you.
A Toronto supplier fails to deliver custom equipment central to a client's business launch. Damages might include the cost of sourcing a replacement, plus provable lost profits directly caused by the delay — but only to the extent those losses were reasonably foreseeable at the time the contract was signed.
Small Claims Court or Superior Court?
Claims of $50,000 or less generally belong in Small Claims Court — faster, cheaper, and less formal. Larger claims, or ones seeking specific performance or an injunction, must proceed in the Ontario Superior Court of Justice. Our full Small Claims vs. Superior Court comparison walks through procedure, cost, and timeline differences in detail.
The Process, Step by Step
- Demand letter. A formal letter setting out the breach and what you are owed — often the fastest, cheapest path to resolution.
- Filing a claim. If the demand letter does not resolve things, we file a Statement of Claim (or Small Claims Court Plaintiff's Claim) in the appropriate court.
- Response and, where required, mediation. The defendant files a defence; in Toronto Superior Court matters, mandatory mediation typically occurs within 90 days of the defence being filed.
- Resolution. Most matters settle before trial — through negotiation, mediation, or a well-timed offer to settle. Where necessary, we proceed to trial.
Been Accused of Breaching a Contract?
Not every claim has merit. You may have a full defence — the other party breached first, the term was never actually agreed to, performance was legally excused, or the damages claimed are overstated. If you have received a demand letter or a Statement of Claim, see our guide on responding to a Statement of Claim in Ontario for your deadlines and options.
Call our Toronto breach of contract lawyers at 416-274-2222 for a free consultation, whether you are pursuing a claim or defending one.
Frequently Asked Questions
No. Verbal contracts are legally binding in Ontario. The challenge is proof — without a written agreement, you will need emails, texts, invoices, payment records, or witnesses to establish the terms and the breach. A written contract makes your case significantly easier and faster to prove.
Generally two years from the day you discovered, or reasonably ought to have discovered, the breach. There is also an ultimate 15-year limitation period that applies regardless of when you discovered the loss. Missing the two-year deadline usually bars the claim entirely, so early legal advice matters.
A material breach is a serious failure that defeats the entire purpose of the contract and lets the innocent party end the contract and sue for all resulting damages. A minor breach means the other party substantially performed but fell short in some smaller respect — you can sue for that shortfall, but generally cannot cancel the whole agreement.
In limited circumstances, yes — this is called specific performance, and it is available where money damages would not be an adequate remedy, such as in some real estate transactions or contracts for unique goods. Specific performance is an equitable remedy only available in the Superior Court, not Small Claims Court.
If your claim is $50,000 or less, Small Claims Court is faster and far less expensive. Larger claims, or claims seeking an injunction or specific performance, must go to the Superior Court of Justice. See our full comparison for how to decide.
Preserve every piece of evidence — the contract itself, all correspondence, invoices, and proof of your own performance. Avoid negotiating on your own for too long without documenting the exchanges. A formal demand letter from a lawyer is usually the most effective and least expensive next step.
You may have valid defences — the other party breached first, the term was never actually agreed to, performance was excused by frustration or impossibility, or the amount claimed is overstated. Do not ignore a demand letter or Statement of Claim; responding properly and on time preserves your options.
Cost depends heavily on how far the matter proceeds. A demand letter that resolves the dispute may cost a few hundred to a few thousand dollars; a fully contested Superior Court claim can cost much more. We offer a free consultation and discuss fee options, including flat fees for certain stages.